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Thailand cries foul over EU rice tariffs
The European Union has treated Thailand concluding consultations with the United States on a reduction of rice import duties but postponing similar discussions with Bangkok, a Commerce Ministry official complains.

Under the agreement reached with Washington, Brussels cut the import duty on US brown rice from 65 euros per tonne to 42.5 euros on March 1. Thai rice, meanwhile, is still taxed at 175 euros a tonne.

"The problem for Thailand is that we do not know whether the EU is still willing to consult with Thailand or not. If not, we are afraid that we cannot retaliate because we missed the deadline," said the official, who asked not to be named.

"According to World Trade Organisation rules, Thailand needed to notify the WTO by April 1 if we intended to retaliate. The lower tariff on US brown rice seems to have made Thailand's situation worse."

In an attempt to reform the EU's huge farm subsidy regime, the EU Commission originally reduced import duties for husked or brown rice from 264 euros (around 13,200 baht) a tonne to 65 euros (around 3,250 baht) last September.

Tariffs on white rice were cut from 460 euros (around 23,000 baht) a tonne to 175 euros (around 8,750 baht).

The lower import tariff regime has been accompanied by an overall cut in subsidies that will eventually lower EU rice prices.

Thailand and the US are major white and brown rice exporters respectively to the 25-country trade bloc.

Thailand complained earlier that the wider tariff gap -- 110 euros at the original rates -- between white and brown rice could lead to higher imports of brown rice at the expense of white rice.

Thailand has insisted that the difference in tariffs should not be more than 80 to 90 euros per tonne.

Under the revised tariff rate for brown rice, the gap has widened to 132.5 euros.

"We estimate that the cost of milling [from rice to white rice] is about 80 euros per tonne. Well, if the European importers import brown rice (with a duty at 42.5 euros) and mill it into white rice, they still gain attractive profits," the official said.

To keep its market share in the EU, Thailand wants the EU Commission to expand its duty-free rice import quota from 32 percent or 21,455 tonnes to 40 percent.

Thailand has also held talks with the EU on compensation for lost tariff and tax privileges following the enlargement of the EU by 10 countries last year.

Some agricultural goods such as rice, canned tuna and canned pineapple face higher import tariffs and a cut in tax privileges by the 10 new EU members -- privileges currently granted under the Generalised System of Preferences (GSP).

Thailand can seek compensation under WTO rules that allow members to open talks if any changes in the tariffs imposed by trading partners affect their economies.
MGR Archive 19.4.2005
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